Healthcare Fraud in America
It has been observed that the healthcare system in the United States of America (USA) is a target for fraudsters. In 2016, the total cost of healthcare fraud was estimated to be $2.26 trillion. This is expected to rise to $2.625 trillion by 2025. Healthcare fraud includes billing for services that were not rendered, upcoding (billing for a more expensive service than the one that was actually provided), and prescribing unnecessary tests or treatments. It has been estimated that 3-10% of all healthcare expenditure is lost to fraud each year.
Pharmacia & Upjohn Company, a subsidiary of Pfizer Inc., agreed to pay $1 billion in 2009 to settle charges of kickbacks, false claims, and other forms of fraud. In 2013, Pfizer Inc. agreed to pay $2.1 billion to settle criminal charges and civil liabilities arising from kickbacks to health care providers, making a profit without caring about public health, and other unlawful practices.
The problem of healthcare fraud is exacerbated by the fact that the USA has a large number of private insurance companies, each with their own claims processing systems. This makes it difficult to detect and prevent fraud.
2. The cost of healthcare fraud
Healthcare fraud wastes billions of dollars each year which could be used to provide healthcare for the needy or to improve the quality of care for all patients. In addition, it imposes an economic burden on everyone who pays for health insurance, whether through taxes or private insurance premiums.
3. Prevalence of healthcare fraud
Healthcare fraud is prevalent in all parts of the USA. In 2012, the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) published a report on Medicare fraud in 10 states. The report found that there were widespread problems with billing for services that were not rendered, upcoding, and prescribing unnecessary tests or treatments.
In 2013, the OIG published a report on Medicaid fraud in 11 states. The report found that Medicaid Fraud Control Units recovered $4 for every $1 spent on investigations and prosecutions in 2010-2011. The report also found that there were widespread problems with billing for services that were not rendered and prescribing unnecessary tests or treatments.
4. Detecting healthcare fraud
There are various methods of detecting healthcare fraud, including data mining, audits, and tips from whistleblowers. Data mining is a technique that uses computer software to look for patterns in large data sets that may indicate fraudulent activity. Audits are conducted by government agencies or private companies on a random or targeted basis to verify claims submitted for payment. Whistleblowers are employees or former employees who report fraudulent activity to authorities or the media.
5. Strategies for preventing healthcare fraud
There are various strategies for preventing healthcare fraud, including increased regulation, improved data sharing among government agencies, greater use of data mining and analytics, stronger penalties for perpetrators, and better education of consumers and providers about how to avoid fraudulent activity.
Fraudulent activities within our current healthcare system are unfortunately all too common as indicated by recent reports revealing such activities in 10 different states across America with an annual cost totaling in the trillions; this needs to change if we want maintain a functional society where people can trust in our ability as a nation to provide quality care without